When a brand is extended to the same product category, it is called line extension. In line extension, the two constants are the brand and the product category. Thus we can keep the mineral water brand constant, but extend it to bottles and pouches of different sizes. We can introduce several colours of shampoos under the same brand name. We can have Colgate Dental Cream and Colgate Total, both with different ingredients. The same product can be presented in different forms such as Vikoryl Syrup from Alembic and Vikoryl Tablets, both from common cold. A syrup can be offered in different flavours, e.g. Frooti mango and Frooti raw mangoes.

Line extensions allow us to cater to the different segments in the market. A wide variety of products can be introduced under the umbrella brand name to cater to the differing needs of the customers. Line extensions such as American Express Platinum card, American Express Gold card, American Express Green Card give a lot of flexibility to the organisations to charge different prices. Extensions help us utilise the excess capacity if any. As launching a new brand is costlier, it makes sense to offer extensions. Extensions give us more retail presence. Sometimes trade channels demand line extensions,e.g. Lovable bras were available but the brand is extended to Lovable T-shirts. Extensions can be introduced in response to competitive pressure, thus Colgate was obliged to introduce Colgate gel after the entry of Close Up. Extensions rub off the brand image across all the versions.

Of course, extensions sometimes result into over segmentation and confusion. If extensions dilute the brand image, there could be brand switching. As extensions are easy, we sometimes forego the possibility of developing a new brand. As extensions means more retail shelf space, the trade relations are affected. According to Ries and Trout, extensions make the brand weaker and vulnerable.

Extensions may make us neglect positioning. Ponds talc has a strong skin care image. When extended to Pond’s toothpaste, the original positioning of skin care gets diluted. In extensions, brand is treated just as a name that can be put on any product. Many products are hung on the same name. When brand is extended to a different, product category, it is called brand extension.